Smart home devices that can lower your insurance premiums – InsuranceNewsNet

The smart home devices that homeowners are installing in their homes for security or to monitor their pets can do more than provide peace of mind — they can lower your insurance rates. Smart home devices can cut premiums 10% to 15%, said Pat Howard, senior editor at Policygenius, who is also an insurance agent. That could mean savings of $100 or more per year for many owners, partially offsetting the cost of the devices. “Protected devices make your home more secure,” he said. “Insurance companies will offer credits and discounts.” There is no hard and fast rule on how much a homeowner can save. It depends on a variety of factors, such as the insurance company, the types of devices the homeowner uses, current credits and discounts currently received, and the state where the policyholder lives. Not all carriers offer discounts and not all devices are eligible for discounts.

“They’re not widespread, but they’re becoming more and more common,” he said of smart home discounts.

Columbus-based Nationwide, for example, has a policy that can offer up to a 10% discount that applies to home, water and theft risks in most states. Policyholders can also get a 50% discount on some kits from Notion, which makes smart home monitoring systems that homeowners can install.

Insurers recognize that it is valuable to partner with companies that make these devices that can prevent losses, he said. Sarah Jacobsvice president of product development for personal lines at Nationwide.

“If we can save money on claims, we can pass that on to consumers,” he said.

Nearly two-thirds of homeowners own at least one smart home device, but many don’t realize the devices can lower their insurance premiums, according to a Nationwide survey of 1,500 homeowners last August.

A 2020 survey by Policygenius, an online insurance marketplace, found that 40.4% of homeowners didn’t realize installing a security system in their home could lower their premiums.

Video doorbells, home security cameras and smart thermostats are the most popular items, the Nationwide survey showed. Other devices monitor water leaks, smoke and carbon dioxide alarms, and doors and windows.

Nationwide partnered with Notion in 2020 to offer technology homeowners can use to do things like monitor the home for open doors and windows, smoke and carbon dioxide alarms, and water leaks with a cell phone.

state farm, the state’s largest homeowners insurer, says it provides fire, smoke or burglar alarms or any other home monitoring system. Does not offer discounts for water leak detection system.

smart home devices

can catch water leaks

While customers are aware of video doorbells and other home security devices, they are less focused on devices that can prevent what is among the most expensive insurance claims: water leaks.

The Nationwide survey found that only 7% of homeowners use smart sensors that monitor water leaks. Only 27% say they know about sensors that monitor water flow and leaks, and 24% know about sensors that can shut off water in the event of leaks.

Water is the third leading cause of homeowners insurance claims, with an average of $11,098 per accident, according to Insurance Information Institutean industry group.

Nationwide says that water sensors can reduce premiums by 4%, a savings of $50 for $55 per year for many policyholders, Jacobs said.

“People think safety is the most important thing,” Jacobs said. “From a claims perspective, you’re eight times more likely to have a water leak in your home.”

Over time, the savings can offset the cost of the sensors, he said, though many homeowners get smart home devices for peace of mind.

The cell phone that warned

from a gushing hot water tank

michelle hancock53, of monroe washingtonnear Seattle, was heading out on a five-day camping trip when “my cell phone started freaking out,” he said of the alerts he was getting from the app on his phone. He tells me that there is water in the house.

Hancock installed the Notion system in his home in 2018. The system consists of a series of sensors, each about the size of an Oreo cookie, that he placed around the pipes and his hot water tank.

She was able to call her daughter, who went to Hancock’s house, found water coming out of the hot water tank and turned off the water.

Without the alarm on her phone, Hancock wouldn’t have known what happened to her water tank until she returned home days later.

That leak would have caused at least thousands of dollars in damage to his 1,200-square-foot basement and put generations of family photos at risk.

“People don’t understand water. It’s very insidious,” he said.

Hancock, who owns an insurance agency, put the devices in place to begin with as a way to keep her pets safe. She hadn’t considered the possibility that the devices might save him money on her premiums.

She said a client had a house fire that killed the client’s pets.

“It resonated with me very quickly. Oh my God, no one would know,” he said.

If there was an alert on her phone that a smoke detector had gone off, she could quickly go home or ask a neighbor to check or call the fire department.

The Notion system doesn’t detect smoke, but it listens for the smoke alarm and will trigger the app on your phone, he said.

“If you can prevent these losses, it will affect things on a much larger scale,” he said.

In the case of water, a homeowner may not even notice if a toilet, faucet, or washing machine is leaking. The devices can also detect a large drop or rise in temperature in the house, a possible sign of a failed furnace that could cause pipes to freeze and burst.

He’s also installed similar sensors from Roost and has a Ring Doorbell that activates his phone when someone knocks on the door.

“I couldn’t be a big fan of these devices,” she said. “I wish we could get them into the hands of more people.”

How to get discounts

in home insurance

Research has shown that many homeowners don’t fully understand how homeowners insurance works and what drives rates, said Howard, senior editor at Policygenius. They also tend to stay with the same company.

Howard cautioned that there may be nuances when it comes to devices and their eligibility for discounts.

Insurance companies distinguish between a home with a video doorbell, for example, versus a full security system with central monitoring when it comes to discounts, he said.

There may also be better ways to save money, like raising your deductible, combining home and auto policies, or buying a new policy, something Howard recommends homeowners do every year.

“Homeowners insurance tends to be a bundle and forget something,” he said.

So before purchasing any smart home devices, homeowners should first check with their insurer to see if the company offers any discounts for installing them or has a partnership with a device company like Notion that might offer products at a reduced price. . Insurers can also provide advice on which products work best, she said.

“You don’t want to invest in something that doesn’t do what you want it to do,” he said.

Regardless of getting a discount or not, the devices will grow in popularity with homeowners, he said.

“People love to lock the front door from the bahamas or adjusting the thermostat,” said

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